Correlation Between Mingchen Health and Bank of China
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By analyzing existing cross correlation between Mingchen Health Co and Bank of China, you can compare the effects of market volatilities on Mingchen Health and Bank of China and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Mingchen Health with a short position of Bank of China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mingchen Health and Bank of China.
Diversification Opportunities for Mingchen Health and Bank of China
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Mingchen and Bank is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Mingchen Health Co and Bank of China in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of China and Mingchen Health is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Mingchen Health Co are associated (or correlated) with Bank of China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of China has no effect on the direction of Mingchen Health i.e., Mingchen Health and Bank of China go up and down completely randomly.
Pair Corralation between Mingchen Health and Bank of China
Assuming the 90 days trading horizon Mingchen Health Co is expected to under-perform the Bank of China. In addition to that, Mingchen Health is 2.74 times more volatile than Bank of China. It trades about -0.01 of its total potential returns per unit of risk. Bank of China is currently generating about 0.08 per unit of volatility. If you would invest 414.00 in Bank of China on October 30, 2024 and sell it today you would earn a total of 131.00 from holding Bank of China or generate 31.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mingchen Health Co vs. Bank of China
Performance |
| Timeline |
| Mingchen Health |
| Bank of China |
Mingchen Health and Bank of China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mingchen Health and Bank of China
The main advantage of trading using opposite Mingchen Health and Bank of China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mingchen Health position performs unexpectedly, Bank of China can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Bank of China will offset losses from the drop in Bank of China's long position.| Mingchen Health vs. Ming Yang Smart | Mingchen Health vs. 159681 | Mingchen Health vs. 159005 | Mingchen Health vs. Loctek Ergonomic Technology |
| Bank of China vs. Chengtun Mining Group | Bank of China vs. Xiandai Investment Co | Bank of China vs. China Asset Management | Bank of China vs. Tibet Huayu Mining |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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